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    Immrtal1's Avatar
    Immrtal1 Posts: 3, Reputation: 1
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    #1

    Apr 7, 2007, 02:41 PM
    Direct labor to manufacturing support.implications?
    Manufacturing costs have shifted from direct labor to manufacturing support. What implication does this have for management accounting?
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Apr 7, 2007, 11:49 PM
    If I am understanding what you are saying…

    You are saying that once upon a time, this company spent the bulk of its manufacturing money on the labour force. Now they have machines so the labour force, what is left of it, spend their time keeping the machines working so the machines can make the goods.

    In that case, the cost drive perhaps should be switched from direct labour hours to machine hours.

    You want to use a cost driver that better reflects the true cost. Without actual numbers in a case it is all speculative since you can make an argument to still keep it on the labour as the cost driver.
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